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Reasons the banking crisis isn’t a repeat of 2008

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Re: Reasons the banking crisis isn’t a repeat of 2008

#71

Post by chiefalchemist »

Avshalom wrote: post #70

It aint fucking lost on me that financial papers spent the better part of 2022 arguing that we were headed for a recession. The q4 numbers came in showing the US economy was still expanding and now those same papers are telling me we're in a banking crisis on the basis of like two and a half banks, with SVB and CS both being fully rescued. The fucking owners of capital seem bound and determined to destroy their own s…

> The fucking owners of capital seem bound and determined to destroy their own system.

Nah. These disruptions are a means to an ends. That is, shifting still more wealth to the top. Follow that graph. Everything else is a means to that ends or a distraction.

Re: Reasons the banking crisis isn’t a repeat of 2008

#72

Post by flangola7 »

fyzix wrote: post #23

History never repeats itself, but it does often rhyme. We cannot have a decade of 0% interest rates and expect no consequences. Peter Schiff predicted this from the moment the fed bailouted the banks in 2008. There's nothing the fed can do to escape this one, it's either massive inflation or massive recession. The fed has avoided the latter by bailing out the banks again so expect double digit inflation for the next…

Is there a reason you think it is inevitable that we have to experience one of them?

Re: Reasons the banking crisis isn’t a repeat of 2008

#73

Post by SkyMarshal »

Avshalom wrote: post #70

It aint fucking lost on me that financial papers spent the better part of 2022 arguing that we were headed for a recession. The q4 numbers came in showing the US economy was still expanding and now those same papers are telling me we're in a banking crisis on the basis of like two and a half banks, with SVB and CS both being fully rescued. The fucking owners of capital seem bound and determined to destroy their own s…

They may also be spinning things to scare policy makers into steering things in a different direction.

Re: Reasons the banking crisis isn’t a repeat of 2008

#74

Post by oblio »

chiefalchemist wrote: post #71
Avshalom wrote: post #70

It aint fucking lost on me that financial papers spent the better part of 2022 arguing that we were headed for a recession. The q4 numbers came in showing the US economy was still expanding and now those same papers are telling me we're in a banking crisis on the basis of like two and a half banks, with SVB and CS both being fully rescued. The fucking owners of capital seem bound and determined to destroy their own s…

> The fucking owners of capital seem bound and determined to destroy their own system. Nah. These disruptions are a means to an ends. That is, shifting still more wealth to the top. Follow that graph. Everything else is a means to that ends or a distraction.

I hate all these conspiracy theories. And you know why?

It's because they imply hubris, arrogance, control.

Let's just realize that we all have a lot less control over our environment than we think we do, and some things are just forces beyond anyone's control.

Re: Reasons the banking crisis isn’t a repeat of 2008

#76

Post by coffeebeqn »

klodolph wrote: post #44
dalbasal wrote: post #28

Earlier quoted context omitted.

"A software engineer's take on why an SQL query is slow." isn't the correct analogy, IMO. First, this isn't a banker, it's a bank. A banking crisis isn't the equivalent of a script either. Should you trust meta about monopolism in the social media space, data ownership, child safety, the effects of new media on professional journalism, etc. etc. Big political questions intertwined with his companies' interests. In an…

I wonder how many HN conversations would be cut short if we simply accepted that analogies are imperfect yet useful. They provide a very limited amount of insight into any topic—so yes, let’s use them, and let’s stop arguing about whether an analogy is the “right analogy”. A analogy will have some element of truth that transfers from one situation to another, and in a good analogy, it will be easy for readers to disc…

Analogies are good as long as they’re good. If they’re not good they just leave people more confused / argumentative

Re: Reasons the banking crisis isn’t a repeat of 2008

#77

Post by lazide »

flangola7 wrote: post #72
fyzix wrote: post #23

History never repeats itself, but it does often rhyme. We cannot have a decade of 0% interest rates and expect no consequences. Peter Schiff predicted this from the moment the fed bailouted the banks in 2008. There's nothing the fed can do to escape this one, it's either massive inflation or massive recession. The fed has avoided the latter by bailing out the banks again so expect double digit inflation for the next…

Is there a reason you think it is inevitable that we have to experience one of them?

Human behavior. When everything is going up, people expect it to keep going up, and their behavior tends to keep pushing it up - until some core limitation gets reached anyway and things get too broken somewhere.

When it keeps going down, same - until it becomes obvious to everyone there is no further down to go.

With lots of head fakes along the way of course.

Humans tend to be kind of terrible at being consistent over long periods of time.

Re: Reasons the banking crisis isn’t a repeat of 2008

#78

Post by Avshalom »

chiefalchemist wrote: post #71
Avshalom wrote: post #70

It aint fucking lost on me that financial papers spent the better part of 2022 arguing that we were headed for a recession. The q4 numbers came in showing the US economy was still expanding and now those same papers are telling me we're in a banking crisis on the basis of like two and a half banks, with SVB and CS both being fully rescued. The fucking owners of capital seem bound and determined to destroy their own s…

> The fucking owners of capital seem bound and determined to destroy their own system. Nah. These disruptions are a means to an ends. That is, shifting still more wealth to the top. Follow that graph. Everything else is a means to that ends or a distraction.

Specifically the recession talk seemed to be an attempt to destroy what little gains labor had made in the past couple years. A banking crisis is not exactly the same but would lead to the same public justifications.

As a personal anecdote:

In the wake of 2008 massive layoffs flooded the market driving down costs for... not necessarily skilled but educated labor. Target for instance suddenly decided that being an ETL required a college degree, a requirement that they relaxed in 2021.

I'm aware creating a public justification for creating a mass of unemployed skilled (read: otherwise expensive) laborers is in their benefit. It's just that the public face of this is destroying their own systems then claiming literally any and everything other than their own actions are at fault while simultaneously positioning themselves to benefit from any attempt at preventing economic disaster.

Re: Reasons the banking crisis isn’t a repeat of 2008

#79

Post by bogomipz »

Avshalom wrote: post #70

It aint fucking lost on me that financial papers spent the better part of 2022 arguing that we were headed for a recession. The q4 numbers came in showing the US economy was still expanding and now those same papers are telling me we're in a banking crisis on the basis of like two and a half banks, with SVB and CS both being fully rescued. The fucking owners of capital seem bound and determined to destroy their own s…

>"The q4 numbers came in showing the US economy was still expanding and now those same papers are telling me we're in a banking crisis on the basis of like two and a half banks, with SVB and CS both being fully rescued."

Why would GDP(a lagging indicator) and a current event(a wave of banks over the last two week) be mutually exclusive?

You also seem to have overlooked some significant details and context. To date there have been four bank rescues not two - Signature Bank, First Republic, SVB and Credit Suisse.

The Credit Suisse collapse resulted in 17 billion in AT1 bonds being written down.[1].

SVB’s uninsured deposits(anything over 250k) accounted for 94% of its total deposits and the FDIC took the extraordinary step of insuring those deposit after the fact.

We witnessed the US Treasury Secretary this week suggest that the government would backstop all uninsured deposits at smaller banks.[2]. She then later had to walk that back.

The First Republic rescue saw three of the largest US banks depositing 30 billion dollars into it in order to prop it up.

[1] https://www.reuters.com/business/finance/credit-suisse-write...

[2] https://www.reuters.com/markets/us/treasurys-yellen-says-com...

Re: Reasons the banking crisis isn’t a repeat of 2008

#80

Post by Dalewyn »

fyzix wrote: post #23

History never repeats itself, but it does often rhyme. We cannot have a decade of 0% interest rates and expect no consequences. Peter Schiff predicted this from the moment the fed bailouted the banks in 2008. There's nothing the fed can do to escape this one, it's either massive inflation or massive recession. The fed has avoided the latter by bailing out the banks again so expect double digit inflation for the next…

>bailing out the banks

My understanding this time around is the depositors rightfully got bailed out (both to maintain peoples' trust in banking, and because losing your money to others' failures fucking sucks), but the banks themselves were left out to dry.

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